What is Master Data Management
In the data family, after Big Data, Data Broker, Data Visualization, Data-Driven Marketing and Data Centre, comes Master Data Management! If you do not have data migraine or data nausea, it’s a good sign! Formerly a buzzword, data is everywhere today. It supports managers in decision-making, facilitates the work of sales teams, is exchanged on online advertising platforms and is a new black gold for companies. In most organizations, however, data is often of poor quality or poorly used. Lack of structure, lack of time, silos between departments or subsidiaries … the reasons are many, but the consequences are unfortunately still the same: loss of time (and therefore money), poor organization, rough decisions and the real risk of missing out on growth opportunities. It is to answer these critical challenged that MDM (Master Data Management) exists. Let’s explain it to you.
MDM for dummies
Master Data Management is a set of tools, techniques, and strategies for creating a single source of data within an organization.. It provides a global, comprehensive and constantly updated hub that brings together all the data of the company, including its groups and subsidiaries, and that works through all the software and tools used (CRM, ERP, DMP , WMS, etc.). The creation of a high-level metabase is good practice in data management as it limits errors and redundancies in the proper execution of business processes. The data most commonly embedded in a MDM are often the same: lists of customers, employees, suppliers, external providers, product references, contacts list, inventories, contracts and financial information.
Reference data management does not create data: it groups data together and keeps it updated. If every data item is functional in its own environment, why engage in MDM?
- For uniqueness of the data item and its description: there is nothing more volatile than a data item. It can easily be changed, modified and edited. When Paul Martin, logistics manager, is registered in the employee file, he can also be registered under the name of P. Martin in the training file. Or as Paul R. Martin in payroll management. This means three names for the same person. Preserving data uniqueness avoids these biases, while managing homonyms perfectly.
- Elimination of the risk of redundancy and obsolescence: a product reference that is renewed in the inventory will also be renewed on the website, in the intranet, in billing software. No need to make changes by hand on all systems. The same applies to a customer who changes address, job, or to the creation of an existing customer.
- Fast and efficient decision-making: because all data is stored in one place, it’s easy to extract, analyse, and report on it. Whether it’s an audit, an annual report or a commercial report, all the data is accessible. A situation that facilitates and accelerates decision-making.
- Process improvement: internally, it can be complex to know where this data is. This situation is familiar to all companies managing multiple systems in parallel. MDM improves the management of your processes, facilitates controls and guarantees quality data.
- Better data sharing: in MDM, data items are mapped for easier communication with each other and it becomes possible to make complex filters. Do you know the volume of sales billed to your Facebook fans who attended your last webinar? MDM knows.
What data should be included in MDM?
While each company is different, we often find five main criteria:
- The data must be reusable: does the file rented to a data vendor for a one-off email marketing operation have its place here? Maybe not.
- The data must have value: how are you going to use the data in question? Let’s take a daft example: the age of your employees can have an impact in calculating your age pyramid and in anticipating retirements. Their horoscopes certainly have much less impact!
- The data must be multiple and dispersed: if a data item is in several tools or used by several services for different purposes, it merits its place in MDM.
- The data must be able to live for a long time: a data item is alive and has a life cycle of its own. To avoid cluttering your MDM, it is not always useful to populate it with short-lived, transient data.
- It must be scalable a prospect that becomes a customer, then changes company and keeps you as a supplier. An employee who changes service, who trains and becomes a manager. Two examples of relevant scalable data to provide a holistic and historical vision.
From these criteria, it is easy to integrate data into MDM. Examples:
- Customer and prospect data: including contact details, interaction history, place in the sales tunnel, purchase history, turnover per customer, website visitors, KPI webmarketing and social networks , etc.
- Supplier data: including contact details, delivery times, purchase history, price trends, etc.
- Financial information: billing items, payments, follow-up of reminders, financial ratio by group, product, range or subsidiary, etc.
- Employee data: contact information, company history, training history, annual interview results, salary evolution, age, contact in case of emergency, etc.
- Product data: references, cost, sales price, sales evolution, inventory data, etc.
- Contractual data: work contracts, validated quotations, terms and conditions of use, GDPR regulations, etc.
Who can start MDM?
While MDM is a tool for continuous improvement in performance, not all organizations need it. MDM necessarily requires a minimum of structure and will be effective in a fragmented environment with multiple source systems and scattered data. MDM then becomes a relevant lever for well-established SMEs, mid-cap companies and large groups. It is also very useful for upscaling and structural changes related to the life of the company (buyout, merger, spin-off and concentration of assets). MDM is often seen as a relief by business owners who are sometimes concerned about the excessive atomization of data in their organization. Because it transcends work usage and habits, MDM creates tangible and real added value on a daily basis for a more productive, efficient and profitable company.